Guarantees

It is necessary to make reliable well-timed payment of trade contracts for successful work of the firm in international markets. "Megabank" PLC, taking care of the reputation and image of its clients and for satisfaction of their needs in making international payments, offers a wide spectrum of bank services, which allows to solve problems of the most requiring clients.

Bank guarantee is a way of security of contract obligation performance, according to which the bank-guarantor assumes liabilities before a beneficiary to pay money for a principal in case the latter hasn’t performed obligations in complete volume or their part in case of presentation of the demand and keeping of all demands stipulated by the guarantee conditions by a beneficiary.

Guarantees allow the partners, who enter into the contractual relations, to be sure, that the contract, signed by them, will be really executed. This circumstance gets its special meaning in the sphere of international trade, where there is consolidation of interests of the partners with different national legislations. The bank guarantee is also a form of security of obligation performance by one of the parties on the main contract with a delay in payment. In its turn it allows the applicant to avoid temporary deficiency of circulating assets, which legal entities, that carry out its financial-economic activity both in international and internal markets, have from time to time.

"Megabank" PLC gives guarantees both in local and foreign currencies for security of performance by the principal of the obligations on the main obligation before the beneficiary.

1. The guarantee of payment is the bank’s written obligation, given under the order of the buyer for the benefit of the seller to pay the latter the guarantee sum in case the buyer doesn’t perform its payment contractual obligations.

Usage of this tool will give your enterprise an opportunity:

• to reduce expenses for interests for usage of bank credit and to receive additional income;
• to involve additional circulating assets without issuing the bank credit.

The schedule of the guarantee of payment:

1. The contract is drawn up between the Seller and the Buyer. It provides:
   • delay of payment;
   • necessity of granting of the bank’s guarantee of payment.
2. The contract on granting guarantee and security is drawn up between the Seller and the Buyer.
3. The bank issues guarantee for the benefit of the Seller, which provides the obligations of the Bank to pay to the Seller in case the Buyer doesn’t execute its obligations on the contract (doesn’t make payment in time).

2. The guarantee of refund of advance payment is a written obligation of the bank, given under the order of the seller, that receives the advance from the buyer, to refund the advance payment to the buyer in case the seller doesn’t perform the obligations on delivery;

3. The guarantee of the contract performance is a written obligation of the bank, given under the order of the seller of goods or services, or another contractor for the benefit of the buyer or customer to pay the latter the guarantee sum in case the former doesn’t perform its obligations on the appropriate contract;

4. Tender guarantee is a written obligation of the bank, given under the order of the party, which takes part in the tender, for the benefit of the party, which organizes the tender, to pay the latter the guarantee sum at infringement by the tender participant of the tender conditions, contract in the part of refusal from its realization after the participant is recognized as the winner of the tender.

Security of the guarantee:

"Megabank" PLC gives guarantees on the following kinds of security:

• a pledge of the property rights on deposit;
• a pledge of property (real estate, transport, equipment, goods etc).

Tariffs on guarantees:

Main conditions of granting of the guarantees, covered with money:

• covering on guarantee – deposit. Validity of the contract for opening of the deposit account should exceed validity of the Guarantee for not fewer than 2 calendar days;
• the size of commission of "Megabank" PLC for carrying out of a guarantee operation – from 1,0% annual depending on the sum of the Guarantee.

Main conditions of granting of the guarantees, not covered with money:

• covering on guarantee – a pledge in another (not money) form;
• the size of commission of "Megabank" PLC for carrying out of a guarantee operation – from 4,0% annual depending on the sum of the Guarantee.

"Megabank" PLC holds the action:

the enterprises, which place money on deposit (in the sum of not less than the equivalent of 100,0 thousand USD), will receive the discount at the rate of up to 50% from the cost of the basic rates on documentary operations.

The Department of Documentary Operations and Currency Control
30 Artema, room 306, Kharkiv, 61002
tel. (057) 714-07-03, 714-33-64.
E-mail: ft@megabank.net